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US Securitization Awards 2023: Securitization Rating Agency of the Year – KBRA

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The rating agency market rankings for securitization in recent years all tell a similar story. Across a range of structured finance products from consumer and small business loans to esoterics, KBRA emerges on top. For the third year in a row, the firm’s breadth of coverage, depth of insight and commitment to quality make it GlobalCapital’s Securitization Rating Agency of the Year.

“We're excited and honoured to receive the award for the third year running,” says Eric Thompson, the firm’s global head of structured finance, who ultimately attributes the firm’s success to its people. “We have a great senior leadership team and our analytical staff put a huge amount of energy into their work.”

The analytical thoroughness and rigour that helped the firm secure a foothold in a competitive market more than a decade ago has never ebbed. KBRA continues to issue timely and insightful new issue and surveillance reports, along with market commentaries on a range of topics. “We’ve issued well over 125 already this year,” says Thompson. “But it's not the number – it's the quality and content of the report that matters.”

In terms of issuance, the market may have slowed down in 2022, yet KBRA rated the highest combined number of asset and mortgage bond issues in the U.S., and continued to expand its presence in Europe. In ABS, KBRA is a known leader across numerous Consumer and Commercial ABS asset classes and has also been an active player in ABS ratings for the rapidly growing private credit space. For mortgages, the firm was ranked number one across overall RMBS, prime and non-prime RMBS in the US, and remained active in CMBS, particularly among conduit and Freddie K-Series transactions.

In addition, KBRA’s structured credit practice rated CLOs and a variety of transactions that leveraged the analytical work of its corporate team. The latter continued a tradition of broadening KBRA’s horizons into new segments, for example recurring revenue transactions. “We’ve rated more than a dozen of these deals and recently published dashboard reports to give investors valuable insights into the performance of the underlying collateral across our rated universe,” says Thompson.

Core values including innovation and collaboration have made the agency a force in the esoteric market. For several years, KBRA is the most prolific agency when it comes to high-profile products including solar and whole business securitizations. “We’ve rated an incredibly diverse array of asset classes including utility receivables, natural gas, and music royalties,” says Thompson, noting that KBRA’s team thrives on bringing its trademark insight to unique assets. The firm recently rated the fourth deal under its communications infrastructure methodology, which comprised fiber-optic assets. “The analysts are really excited to dig into new sectors and work out how to deliver the best product possible to help educate the market,” says Thompson.

Publishing insights that have become the gold standard in the securitization industry means KBRA faces high expectations. Yet the firm still makes an effort to go beyond the ratings. “That’s particularly important in these uncertain economic times,” says Thompson. “Part of that is making sure we are highlighting how current and expected market conditions might impact different sectors and transactions.” Thus far in 2023, KBRA authored reports on secular trends in real estate, which included a number of publications on office conditions, as well as changing dynamics in the single-family rental space and trends in emerging sectors such as data centres.

“In addition to the timely and rigorous analysis we provide on surveillance and new issues, our analysts are always accessible to discuss our ratings, research, and general market conditions – it is one of KBRA’s key differentiating factors and I think part of why we’re recognised by the structured finance market,” says Thompson.